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Friday Mar 8, 2024   
Western electricity markets are at a crossroads. Pressing reliability needs have motivated the development of the Western Resource Adequacy Program. The need to integrate large volumes of new renewables has provided the motivation to expand centralized markets (my general term which covers RTOs/ISO/EIMs) throughout the Western Interconnect. The Western Energy Imbalance Market (WEIM), brought to you by CAISO, currently has 22 balancing authorities participating. The Western Energy Imbalance Service Market (WEIS), brought to you by SPP, has 12 participants. The CAISO’s WEIM covers a larger geographic area and has more load than the WEIS, which is mostly in Colorado and parts of Wyoming. While the WEIM and WEIS represent great first steps towards the development of centralized markets ... » read more
Thursday Mar 7, 2024   
A lot of the discussion tied to renewables in ERCOT this winter was focused around solar and battery growth.  The increase in solar capacity in ERCOT has been particularly evident with the string of mild temperatures that have shown up for much of the winter and has resulted in the monthly solar profiles for December, January and February coming close to doubling year-on-year for the midday peak.  We’ve written about this phenomenon in past Newsletter Renewable Monthly reports, available as part of our Platinum Plus newsletter eCommerce package.  The changes have presented steeper slope for the afternoon/evening net load profile in ERCOT, putting more of a burden on ERCOT’s thermal fleet as well, a topic that we explored in a past Newsletter Special Report ... » read more
Wednesday Mar 6, 2024   
As part of the EnergyGPS eCommerce Platinum/Platinum Plus package, we publish a monthly recap report where the focus is on some of the key drivers covered throughout the month in our North America Power and Natural Gas Enterprise Product Offering.  This past month saw a reprieve from the cold stint that ravaged the entire Pacific Northwest and the middle third of the Lower 48 in January 2024. The balmy spring-like temperatures across the Midwest, Ohio Valley and Northeast did not bode well for the natural gas producers and storage holders.  If there was one entity outside of Mother Nature to blame it was Punxsutawney Phil, the groundhog, as it did NOT see its shadow on February 2nd. The binary outcome signaled to the believers that there will be an early spring, but nobody ... » read more
Tuesday Mar 5, 2024   
The California market always has something to discuss as it has a Renewable Portfolio Standard, Carbon Market and a natural gas landscape that has been on both sides of the equation when it comes to not having enough molecules to the current stage of over-supplied heading into the middle of March. Figure 1 | California Natural Gas Storage If you recall, prior to Winter 2023, SoCal Gas was walking out of a winter season (2022) where the incremetnal gas that was injected into Aliso Canyon was not utilized due to a robust renewable landscape with both behind the meter and utility-scaled solar leading the way. Throw in the simple fact that there were no nuclear outages in play for Spring 2023 and the natural gas system was flush with molecules.  Fast forward to now and a similar ... » read more
Monday Mar 4, 2024   
The I-5 corridor in the Pacific Northwest saw massive amounts of precipitation over the weekend, all the while the temperatures were hovering in the 35-38 degree range with wind gusts creating wet snowflakes.  The wetness turned into fluffy flakes as you moved to the 500-foot elevation level and the higher site-points were showing a snowpack thickness that made sense given the conditions mentioned. Figure 1 | I-5 Corridor Weather and its Impact on Pacific Northwest Snowpack What this means for the Pacific Northwest hydro outlook is two-fold, first the moment it gets warm we will see the Westside region deliver a melt that pushes over .7 GWa into the balancing act that would otherwise not be there.  With the next few days expected to remain cold and have precipitation, Mother ... » read more
Friday Mar 1, 2024   
The 'calm before the storm' is a saying that seems to resonate within the energy markets as of late, especially at a time when the Lower 48 natural gas market is looking at storage levels near all-time highs as February comes to an end. The graph below illustrates the weekly EIA storage numbers released over the past three years with the darker line (red dots) representing the current year while the gold line is associated to Winter 2023.  The thing that sticks out the most is that back at the beginning of February, the past two years were almost on top of each other only to have the past four weeks levelized the withdrawals while last year continued its gradual storage withdrawal rate. Figure 1 | EIA Weekly Storage – Lower 48 There are a couple of reasons for the ... » read more
Thursday Feb 29, 2024   
Sitting in the Energy GPS office in downtown Portland this winter, judging by the view out the window one would think that the winter was on the wet side, with the typical Northwestern foggy mornings and rainy days that could rival most of the years in recent memory.  As those who have been following the hydro year know, however, this narrow view does not capture what has been taking place.  Portland—along with much of the area west of the Cascades (the so-called “I-5 corridor”)—have been visited with plenty of rainfall, especially in Oregon.  Further outside of the Portland metro area, upstream on the Columbia river are the areas and river basins where the precipitation really matters when it comes to how much water makes it way into the hydro ... » read more
Wednesday Feb 28, 2024   
This February Lake Mead is in the lead in terms of elevation and gains so far in 2024. Compared to this time in 2022, the current elevation of 1,077 feet is up 10 feet. Compared to this time last year, the lake has made an impressive 30 feet in elevation gains. This is great news for the lake sitting behind Hoover dam especially as the last several years have been rocky dealing with climate change and the impacts of a decades-long megadrought. This time last year, the lake was still sitting close to its lowest point ever, but an impressive water year meant large gains in elevation throughout the spring and summer of last year. This year, too, snowpack in the Rockies is above normal and snowmelt could mean an even larger lead for Mead compared to the past couple years. However, experts ... » read more
Tuesday Feb 27, 2024   
The natural gas market has entered into what is known as bid-week where the current prompt month moves off the board and the following month moves into the slot.  It is common for the bid-week days to be volatile as everyone starts to jostle for positions leading into the new month and option expirations occur on the final days.  With the power market, it is a bit simpler as there is no bid-week to work through as positions get carried over and the trading goes from a futures contract to physically liquidating in the dailies and trading the balance of the month off of market fundamentals. Figure 1 | SPP Curtailment Week In recent days, we have discussed the increased wind generation that has been present in key markets, along with the volume that is being forecasted as February ... » read more
Monday Feb 26, 2024   
In this evening's NYMEX pre-trading session has the (soon to go off the board) April contract up $0.06 as it sits around the $1.66 level. The movement is solely tied to adjustments on the production side as the weather forecasts continue with the prevailing warm east/cold west structure through the first third of March. The latest commentary from the Atomspheric-G2 meteorologist team reinforces the dynamic through Day 20 of the outlook with only a mention of normal air in the lower latitudes like the Gulf and Southeast. The only region of the country that will see below normal temperatures is that of the Pacific Northwest, inland California, and parts of the Desert Southwest. It should be noted that the higher elevation areas of the regions mentioned will see snowpack accumulation given ... » read more
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